Vitalik On Stealth Address Mechanisms

Friday, January 20, 2023

Quick Take

  • Vitalik’s incomplete guide to stealth addresses.
  • Convex deploys its new wrapper contract.
  • Aztec releases local dev networks.
  • ZigZag airdrop for early market makers.

Vitalik’s Incomplete Guide To Stealth Addresses

Ethereum creator Vitalik Buterin published an incomplete guide to stealth addresses, covering mechanics and use cases for privacy on Ethereum. A stealth address provides privacy for the recipient of a transaction, typically by generating a fresh address for each receiving transaction. Current solutions don’t support NFTs or small-cap tokens.

Vitalik describes a stealth address scheme in which a receiver holds a root spending key used to generate a stealth meta-address. A sender can then use the meta-address to generate a new stealth address belonging to the receiver. Furthermore, a key blinding mechanism is used to ensure that only a receiver can generate a spending key for a newly generated stealth address.

Vitalik also mentions the use of stealth addresses with elliptic curve cryptography. However, he notes that stealth addresses lack a way to pay transaction fees. As a solution, he proposes the use of ZK-SNARKs to anonymously transfer funds to pay for fees. Alternately, Vitalik suggests using searchers and blind signatures to fund transaction fees on ether-less wallets.

New Convex Wrapper Goes Live

Convex deployed its $cvxCRV wrapper contract, which distributes additional rewards to stakers. Introduced earlier this month, the wrapper uses platform fees to acquire $cvxCRV off the market and stakes it in the contract to generate rewards, which are then distributed to stakers. Convex also updated its UI to reflect the new contract.

Current stakers are encouraged to un-stake their position from the old contract and re-stake it on the new wrapper contract to receive the additional benefits. Users can still claim any remaining rewards from the old contract. The new wrapper enables reward weight adjustments and the ability to transfer staked $cvxCRV as an ERC-20 token.

Aztec Releases Local Dev Environments

Aztec Network released local devnet environments for its Aztec Connect ecosystem. Developers can now run a local fork of Ethereum mainnet to simulate what their code will look like in production. The release includes both a basic network and a full mainnet fork with bridge contracts​. The basic devnet features an Aztec sequencer.

The fully-featured devnet can be used to test bridge functionality and integrations with L1 protocols. Aztec recently started its third grants funding round, which seeks the development of Aztec Connect Bridges and Aztec-native applications. Aztec Network is a privacy-focused L2 network that uses ZK-Rollup.

ZigZag Announces Market Maker Airdrop

ZigZag, an order book DEX, announced an airdrop for early market makers on zkSync. Users who operated market-making bots and filled orders on the DEX have been allocated a share of ZigZag tokens. The snapshot was taken on January 17th at 6:00 UTC. Rewards are based on the number of trades executed.

Users don’t need to claim the tokens since they are being airdropped automatically. Users on Arbitrum One, which is supported by ZigZag, are not included in the airdrop. ZigZag initially launched its governance token in June 2022 through a token sale on its exchange. ZigZag plans to add support for StarkNet’s L2 network.

Liquity Releases Q4 Report

Decentralized borrowing protocol Liquity released its Q4 2022 report. TVL in Liquity increased by 22,928 ETH from Q3 to Q4. The protocol also experienced a 40% increase in the number of active Troves, which are Collateralized Debt Positions (CDPs) backed by ETH. Liquity also launched Chicken Bonds in Q4, which now hold over 70 million LUSD in TVL. Chicken Bonds provide LUSD holders with boosted rewards from yield generated through various liquidity buckets.